The Swedish Mortgages Market - Report 2021
A brief description of general economic trends is followed by a discussion of developments in housing construction. The year 2020 was marked by the outbreak of Covid-19 and the major effects of the pandemic on society and the economy. The economy recovered at the end of 2020, and this continued during the fi rst half of 2021.
Most observers believed that the high construction fi gures, which had decreased somewhat after the peak in 2017, would continue to fall during the pandemic. however, the housing and construction market was more resilient than many observers had expected, and demand for single-family homes and larger apartments increased instead during the pandemic with many people working from home. Construction is expected to increase further in 2021.
Housing prices have been increasing for a number of years. After the outbreak of the pandemic in 2020, there was considerable uncertainty on the housing market. Following the introduction of several measures by the authorities to reduce the effects of the pandemic, this uncertainty decreased and was instead replaced by significant price increases, in particular among single family homes during the second half of 2020 and the first half of 2021. By the end of June 2021, the price of single-family homes has, on average, increased by 20.1 percent and the price of tenantowned apartments has increased by 11.5 percent.
Total residential mortgage lending amounted to Sek 4,855 billion in June 2021. The rate of growth for mortgages was 6.3 percent annually, which is an increase compared with the same period last year when the growth rate was 5.9 percent. The lending increase to single-family homes was 6.0 percent annually in June 2021. The rate of lending for tenant-owned apartments is higher than for single-family homes, amounting to 7.5 percent annually at the end of June 2021. Mortgage interest rates have generally declined for several years and interest rates are at historically low levels.
Household indebtedness is outlined, as are implemented and proposed measures to counteract high indebtedness. Finally, an overview is provided of the main forms of borrowing for mortgage institutions, as well as information regarding the fact that the general easing by Finansinspektionen (Swedish Financial Supervisory authority) of the amortisation rules implemented in april 2020 following the outbreak of the pandemic has been discontinued at the end of august 2021.